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Verizon reports 100,000 postpaid net adds in Q3


Verizon continued to emphasize improvements in its overall financial performance as it once again lost customers in its Consumer group in Q3 2023, which were offset by gains in the Business group.


Granted, the loss of 51,000 subscribers in the Consumer group was not as bad as the year-ago quarter, when it lost 189,000, or even the prior quarter, when it lost 136,000.


In the Business segment, Verizon added 151,000 in Q3, which was an improvement over the 144,000 net adds in Q2. That also gave Verizon the bragging rights to 100,000 total postpaid phone net additions for Q3 2023 when combining Consumer and Business segments.


Verizon shares were up more than 8% this morning, trading around $34.03, after it raised full-year free cash flow guidance from the previously estimated $17 billion to above $18 billion.


Total wireless service revenue was $19.3 billion, a 2.9% increase year over year.

Free cash flow year-to-date was $14.6 billion, an increase from $12.4 billion in 2022. The increase was due largely to Verizon’s focus on “high-quality revenue growth, disciplined promotion strategy, cost efficiency and cap ex reduction” compared to recent years of high capital costs driven by the C-band and fiber investments, said Verizon Chairman and CEO Hans Vestberg during the earnings call today.


Predictably, Vestberg talked up Verizon’s MyPlan, which launched in May, giving customers more choice in how they customize their experience. During the third quarter, Verizon enhanced that plan by adding “Ultimate Unlimited,” a third tier with more value and services, further increasing its premium mix and ARPA growth.


“Rather than engaging in aggressive promotional activity, like others in the industry, we’re offering our consumers optionality and flexibility” to choose how they use Verizon’s products and services, he said.

Struggles in prepaid

In the prepaid business, Verizon lost more customers, but Vestberg said he’s encouraged by the quarter over quarter operating improvements and he reiterated the company’s commitment to that business, one that Verizon historically wasn’t heavily involved in.


Prepaid net losses were 207,000. In a note for investors today, Wall Street analyst Craig Moffett noted Verizon’s press release focuses only on their postpaid phone results, “which were a little stronger than consensus expectations. Prepaid results, however, were not. And combined, the subscriber base is still shrinking.”

FWA continues to grow

In the broadband sector, Verizon added 384,000 fixed wireless access (FWA) customers and that business continues to grow despite Verizon adding a $10 price increase for new bundled customers, Vestberg noted.


During the third quarter, Verizon received early access to the rest of its C-band spectrum, which enables it to go from peak speeds of 900 Mbps to “an amazing 2.4 gigabits per second,” he said, reiterating that “C-band is a game change for our business,” providing for better customer retention and a stronger broadband opportunity with FWA.

More tidbits – cap ex, private networks

Verizon CFO Tony Skiadas said they expect 2023 cap ex to come in at the upper end of their guidance range of $18.25 billion to $19.25 billion. The upshot is a reduction of about $4 billion in cap ex in 2023 compared to 2022.


Cap ex for 2024 is expected to be in the range of $17 billion to $17.5 billion, which Verizon considers a “back to business as usual” level of spend after aggressive 5G buildouts.

When it comes to private networks, Verizon continues to see demand increase, but during the Q&A, Vestberg acknowledged that what’s happening is a lot of proof of concepts prior to a big commercial push. The deals start fairly small, sort of like when an enterprise wants a Wi-Fi substitution, and then gradually expand.


They don’t expect to see a big impact from this sector in terms of revenues in 2024, but the groundwork is being laid for that to happen in 2025.


Vestberg emphasized that it’s an area that Verizon hasn’t previously been into, so it represents a totally new market. By running private networks for different enterprises and industries across the country, “I see this as a great opportunity for how we use our spectrum,” which is why they pay a lot of attention to it, he said.


Asked about how happy he is about the choices he made since implementing executive changes about six months ago, Vestberg said he’s “very happy.” It was quite a big change, with six out of the eight seats in the leadership team changing in one swoop. “I think we had good alignment from the first week” on what they needed to do, all the way from Kyle Malady, Tony Skiadas, Sowmyanarayan Sampath and Joe Russo, which represent the four main operational units affected.


“You can see the results right now. The guys are executing extremely well,” though he will continue to push them harder, he said. “I’m happy on the choices and the team is doing well.”


Last week, AT&T reported 468,000 postpaid phone net adds in the third quarter, and mobility service revenues of $15.9 billion were up 3.7% year over year. T-Mobile reports Q3 2023 results tomorrow morning.

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